Europe falls as techs gain

Automakers fall ahead of U.S. auto figures

LONDON (CBS.MW) - European markets fell slightly on Friday as weakness in the auto sector was offset by second-day gains in technology shares.

Germany's DAX Xetra 30 (1876534) fell 0.46 percent, after sporting a 7.3 percent gain on Thursday. The French CAC 40 (1804546) slipped 0.17 percent. Volumes were thin at less than half usual levels with many participants out for the holidays.

Frederic Buzare, a portfolio manager for AXA Investment Managers in Paris, said the technology upturn is largely a function of risk-taking investors chasing gains.

"In a bear or weak market, people focus on the leaders -- SAP, STMicroelectronics and Nokia. If there is a technical rally or the economy is seen becoming more positive, they will find some reason to go outside this area. Perhaps it's too early, except for people chasing beta," Buzare said.

AXA has recently trimmed its holdings in Nokia, due to its high price-to-earning ratio relative to the rest of the market. "It's a pretty good premium for a company which is not growing at a double-digit rate. This premium is mainly related to a strong balance sheet," Buzare said.

Fiat
FIA
on Friday said it is still pursuing its restructuring plan, and company's creditor banks have given a cold shoulder to Roberto Colaninno, the former head of Telecom Italia and would-be investor in the debt-laden automaker, AFX reported La Republicca newspaper as saying. Colaninno heads a group said to be favored by the Italian government that is looking to purchase and invest in the company. Shares were 2 percent higher in Milan after retreating from stronger gains earlier in the day.

Moves toward Lyonnais acquisition

In banking news, Credit Agricole (004507) managed to remove an obstacle in its bid to acquire Credit Lyonnais, as the French insurer AXA (012062) agreed to sell its 5.3 percent stake in Lyonnais (018420). But BNP Paribas (013110) said it will take its time - it has until early February - to decide whether to launch a counter-bid. Its shares fell 0.5 percent.

French hypermarket sales fell 1.3 percent in December compared with the same month last year, and supermarket sales fell 1.9 percent, according to figures from a French trade association. Carrefour (012017) fell 3.1 percent.

Novartis
NVS, -1.41%
rose 5.1 percent in Zurich after announcing that the European Union had approved its Glivec drug for first-line treatment of adults and children with chronic myeloid leukemia, Reuters said.

Eurozone CPI

A rise in inflation in the eurozone in December largely hit expectations. The European Union statistics office said its harmonized index of consumer prices was up an estimated 2.2 percent in December from a year earlier. Eurostat pointed out that the figure could be misleading, however, because of the impact of the introduction of the euro from one year ago. Eurostat will release a final take on December CPI figures on Jan. 22.

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